Vacation homes/rentals and airplanes...

[genna]

So.... My folks have floated an idea of buying a beach property. This would be for family use and for vacation rental.

Being the enterprising pilot that I am, this quickly lit up an "airplane as a business transportation expense" sign in my head.

Now, I'm somewhat familiar with the IRS business rental vs. dual use rental rules. And this is likely to be a hybrid dual use. Where things get more complicated is how to fit a purchase and use of an airplane into this scenario. Obviously, a professional advice would be sought if this ever comes close to fruition. But for now I'm just looking for an advice on options and possibilities.

The pilot is PPL and would be a part owner of this property. CPL is likely in a near future as well.

The airplane would obviously be used for dual purpose as well.

 

[Lachlan]

More important is the question of if you can log it or not, and if so, how?

 

[coloradobluesky]

Maybe you could deduct the cost of flying to the IRS audit!!!

Or kick into an LLC or Chapter S, owned by a trust. Spread ownership around to holding companies in three states and things will be so confused either you or your IRS auditor will have a coronary before the audit is over!!

 

[genna]

More important is the question of if you can log it or not, and if so, how?

that was my next question, damn it. you stole my thunder! . jk.. please no logging questions. I'm sure there will be enough irs/tax/fraud remarks here to keep it interesting

Maybe you could deduct the cost of flying to the IRS audit!!!

Or kick into an LLC or Chapter S, owned by a trust. Spread ownership around to holding companies in three states and things will be so confused either you or your IRS auditor will have a coronary before the audit is over!!

That sounds like a good plan. I like the approach here. Although, while saving me from the audit, it may get me charged for murder. Of course I can claim that the LLC did all the killing and I am not liable.

On a serious note, I'm not looking to defraud the IRS, just want to know what the basic rules are. It's probably all just a pipe dream anyway.

 

[coloradobluesky]

The basic rule is if you have business income you can deduct expenses from that income that are incurred in pursuing that business income.
The reality is, any deductions should have a high probability of surviving an IRS audit.
The experts for this stuff are CPAs and tax accountants, not pilots.

 

[Sam D]

The experts for this stuff are CPAs and tax accountants, not pilots.

Some are both. Even though one might get the impression from here that all pilots are either: full time, attorneys or IT folks.

 

[cgrab]

You can deduct the cost of a trip to the rental property if it was incidental to another purpose such as meeting a plumber to replace all the copper pipes that were stolen from the crawl space (don't ask but it happens more than you think). You make the deduction on the house income not the plane.

 

[Ravioli]

I think the question at hand is whether the PPL will be flying to the property for "ancillary business" or if he is transporting renters to the property. In the first example it should not require CPL authority since it is not flight for hire. The latter would probably require CPL and insurance covering the passengers.

And I'm sure this will be expanded upon shortly.